Question

Prepare journal entries to record the following merchandising transactions of Cabela's, which uses the perpetual inventory system and the gross method. Hint. It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable-Boden July 1 Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, 1/30, OS shipping point, invoice dated July 1. 2 Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, TOB shipping point, invoice dated July 2. The merchandise had cost $500. 3 Paid $125 cash for freight charges on the purchase of July 1. B Sold merchandise that had cost $1,300 for $1,700 cash. 9 Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, 1/60, POB destination, invoice dated July 9. 11 Returned $200 of merchandise purchased on July 9 from Leight Co., and debited its account payable for that amount. 12 Received the balance due from Creek Co. for the invoice dated July 2, net of the discount. 16 Paid the balance due to Boden Company within the discount period. 19 Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, 1/60, TOB shipping point, invoice dated July 19. 21 Gave a price reduction allowance) of $100 to Art Co. for merchandise sold on July 19, and credited Art's accounts receivable for that amount. 24 Paid Leight Co. the balance due, net of discount. 30 Received the balance due from Art Co. for the invoice dated July 19, net of discount. 31 Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60, POB shipping point, invoice dated July 31. View transaction list Journal entry worksheet 3 4 5 6 7 ..... 17 Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15. n/30. FOB shipping point. Invoice dated July 1.

Answer 1

Journal Entries:

No	Date	Account title and explanation	Debit	Credit
1	Jul 01	Merchandise inventory	$6,000
		Accounts payable-Boden		$6,000
		[To record purchases on account]
2	Jul 02	Accounts receivable-Creek	$900
		Sales		$900
		[To record Sales on account]
3	Jul 02	Cost of goods sold	$500
		Merchandise inventory		$500
		[To record cost of goods sold]
4	Jul 03	Merchandise invetory	$125
		Cash		$125
		[To record cash paid for freiht]
5	Jul 08	Cash	$1,700
		Sales		$1,700
		[To record cash sales]
6	Jul 08	Cost of goods sold	$1,300
		Merchandise inventory		$1,300
		[To record cost of goods sold]
7	Jul 09	Merchandise inventory	$2,200
		Accounts payable-Leight		$2,200
		[To record purchase of inventory on account]
8	Jul 11	Accounts payable-Leight	$200
		Merchandise inventory		$200
		[To record purchase returns]
9	Jul 12	Cash	$882
		Sales discount [900 x 2%]	$18
		Accounts receivable-Creek		$900
		[To record cash collected from customers]
10	Jul 16	Accounts receivable-boden	$6,000
		Cash		$5,940
		Merchandise inventory [6,000 x 1%]		$60
		[To record payment for accounts payable]
11	Jul 19	Accounts receivable-Art	$1,200
		Sales		$1,200
		[To record sales on account]
12	Jul 19	Cost of goods sold	$800
		Sales		$800
		[To record cost of goods sold]
13	Jul 21	Sales returns and allowance	$100
		Accounts receivable-Art		$100
		[To record allowace given]
14	Jul 24	Accounts payable-Leight [2,200-200]	$2,000
		Cash		$1,960
		Merchandise inventory [2,000 x 2%]		$40
		[To record payment for accounts payable]
15	Jul 30	Cash	$1,078
		Sales Discount [1,000 x 2%]	$22
		Acconts receivable-Art [1,200-100 allowance]		$1,100
		[To record collection from customers]
16	Jul 31	Accounts receivbale-Creek	$7,000
		Sales		$7,000
		[To record sales on account]
17	Jul 31	Cost of goods sold	$4,800
		Merchandise inventory		$4,800
		[To record cost of goods sold]